Killer Cell Ig-like Receptors (KIR) are expressed on natural killer (NK) cells and some T cells in humans. The ligands for KIR are class I major histocompatibility complex (MHC-I) proteins expressed on virtually every cell in the body. KIR recognition of MHC-I on a normal target cell transduces a negative signal that suppresses activation events and restrains NK cells from attacking. Certain tumor cells and virus-infected cells can down regulate surface MHC-I to escape detection by cytolytic T cells. When an NK cell encounters such a mutant cell, however, the lack of KIR engagement triggers specific lysis and cytokine release toward the abnormal target. Substantial evidence implicates the protein tyrosine phosphatase (PTP), SHP-1, as a component of KIR inhibition. SHP-1 is recruited to the phosphorylated cytoplasmic domain of KIR. The molecular mechanism by which SHP-1 mediates negative signalling is unclear, however, and the prevailing view that SHP-1 mediates all inhibitory function is likely too simplistic. Our evidence clearly also implicates a related PTP, named SHP-2, in negative signalling through KIR. We propose that SHP-1 and SHP-2 are differentially recruited to KIR and that they can mediate inhibition through distinct molecular mechanisms. Identification of specific points at which each PTP disrupts NK cell activation pathways should help to delineate promising molecular targets for designing therapeutic strategies to beneficially manipulate anti-tumor and anti-viral responses by NK cells and other lymphocytes. Our future studies will define the roles of SHP-1 and SHP-2 in negative signalling through KIR by addressing the following specific aims: 1) Characterization of the kinetics of SHP-1 and SHP-2 recruitment to KIR 2) Establishment of the functional roles for SHP-1 and SHP-2 in KIR inhibition 3) Characterization of the roles of kinases in KIR inhibitory function